‘Richest garbo’ Ian Malouf goes from muck to money with $150m backing of new funds management firm Sandstone
The billionaire is backing a new global funds management venture as part of a diversification of his assets, which also include cryptocurrency, yachts, mansions and waste management. He is joined by ex-TDM managers Harrison Moot and Fraser Christie.
Billionaire Ian Malouf had $350m burning a hole in his pocket after some big asset sales last year, so he decided to entrust $150m of that to two thirty-something fund managers breaking out on their own.
Their plan is to invest in stocks around the world run by people just like Malouf.
Dubbed “Australia’s richest garbo”, Malouf is backing the launch of boutique investment firm Sandstone Global Investment, headed by ex-TDM Growth Partners managers Harrison Moot and Fraser Christie.
The founder of the Dial-a-Dump waste business and owner of superyacht firm Ahoy Club, Malouf is pouring his $150m into what former Melbourne schoolmates Moot and Christie are aiming to be a $300m strategy by the time it launches by July or August.
They will run a concentrated global equities portfolio of 10 to 12 stocks zeroing in on companies led by their wealthy and aligned founders, or management teams who do the same.
Malouf’s fortune was estimated at $1.4bn by The Australian in this year’s edition of The List – Australia’s Richest 250, built from the skip bin group he founded in 1984 and sold to then ASX-listed Bingo Industries in 2018 in a $577m cash and shares payday.
His fortune also includes the $353m he made from the sale of a parcel of land once earmarked for a huge waste-to-energy plant in Sydney’s west to data centre business NextDC.
Malouf tells The Australian he has ploughed $100m of his land proceeds into Bitcoin – “I call it my ‘gambling money’ and it’s been fun to watch what is happening with it,” he says.
The $150m he’s placing with Sandstone was, he says, a result of sitting down with Moot – a former partner to one of his daughters – last year to discuss investment strategy.
“I’ve had mixed results doing it myself, let’s face it, and I’m probably really not very good at it,” Malouf says of his own stock-picking acumen.
He was raided by police in 2020, due to the Australian Securities and Investments Commission investigating him over trading in shares in the then Toronto-listed The Stars Group in 2019, before it announced a $US12bn merger with wagering giant Flutter.
ASIC later confirmed in writing to Malouf there was “insufficient evidence to … establish there has been a breach of law”.
It hasn’t dulled his enthusiasm for equities as part of his portfolio which also includes more than $300m worth of Sydney mansions and superyachts – managed by Moot and Christie.
“I think they are extremely talented and have a lot of confidence in what they want to do,” says Malouf of the pair. “So much so that I’d happily write a cheque for anyone who loses money.”
That offer is very much unofficial, but Malouf is exactly the sort of wealthy person who Moot and Christie have approached to co-invest.
“We’re not interested in institutional clients and we’re not going through private wealth channels. We want a small number of relatively large clients, as we want to minimise any time away from core research or portfolio management roles,” Moot says.
The duo are asking backers for a minimum of $5m and will charge an annual 1 per cent management fee of assets under management and a performance fee of 15 per cent of the profits generated by the fund.
Christie says the duo will invest in listed companies only, and mostly likely in firms based or listed in developed markets such as North America, Europe and the United Kingdom.
“It won’t be restricted by geography or sector, but most likely they will be in industries like technology and software, healthcare and consumer. But there are great businesses in some non-traditional growth sectors, like Ian is in.”
Christie and Moot say they have been discussing forming their own firm for “about 15 years”. Their firm’s name is a nod to the rock many of the city’s old buildings are constructed with.
Christie worked at Greenhill & Co under now Transurban boss Michelle Jablko and then Anchorage Capital Partners, while Moot was at Macquarie Group before the pair reunited in the investment team at TDM in 2019.
Founded by Tom Cowan, Hamish Corlett and Ben Gisz, TDM is famed for concentrated investments such as Guzman y Gomez, Rokt and Culture Amp.
Moot says the lessons they learnt working under the TDM founders include seeking out “long-term, concentrated and growth-oriented businesses” and he admired its “incredible focus backing great management teams” and the cultures of companies TDM invests in.
“That is how we want to build Sandstone. They were deliberately patient on how they scaled their firm. We are taking a view that we want to build this fund over many decades. We’re not coming out with a big bang and raising $1.5bn from a super fund. It is more important that we build this business and build it sustainably.
“A figure like $300m is a great start but we are mindful that we should start small and deliver great returns.”
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